Unilever: share price falls, MS deems rebound exaggerated
February 27, 2024 at 09:56 am EST
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Unilever shares posted the biggest drop in the AEX index on Euronext Amsterdam on Tuesday, as Morgan Stanley deemed the recent stock market rally exaggerated.
Following its rebound in recent weeks, the stock is now trading on a PER 2024 of 17.6x, a slight premium to the rest of the consumer staples sector, which is trading at 17.4x earnings, the analyst points out.
An unjustified phenomenon, according to the intermediary, in view of the Anglo-Dutch FMCG group's low earnings-to-cash conversion rate and high exposure to emerging markets.
As a result, Morgan Stanley has lowered its recommendation on the stock from 'in-line weighted' to 'underweight', with a price target reduced from 4,100 to 3,775 pence.
Following these comments, Univeler lost more than 2.1% on Tuesday afternoon, compared with a decline of only 2.1% on the AEX.
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Unilever PLC (Unilever) is one of the world's leading suppliers of Beauty & Personal Care, Home Care, and Foods & Refreshment products with sales in over 190 countries and reaching 3.4 billion consumers a day. Over half of the company's footprint is in developing and emerging markets. Unilever has over 400 brands found in homes all over the world, including Dove, Knorr, Dirt Is Good, Rexona, Hellmann's, Lipton, Wall's, Lux, Magnum, Axe, Sunsilk and Surf. Unilever's Sustainable Living Plan (USLP) underpins the company's strategy. The USLP creates value by driving growth and trust, eliminating costs and reducing risks. Since 2010 the company has been taking action through the Unilever Sustainable Living Plan to help more than a billion people improve their health and well-being, halve its environmental footprint and enhance the livelihoods of millions of people as it grows its business. Unilever has already made significant progress and continues to expand its ambition - most recently committing to ensure 100% of its plastic packaging is fully reusable, recyclable or compostable by 2025.
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